Although Croatia's government utilised the country's recent economic upturn to reduce debt and strengthen external buffers, important challenges still remain, such as the need to restructure public administration and make the pension and health care systems sustainable, a delegation of the International Monetary Fund (IMF) said on Monday.
An IMF mission was recently on a visit to Croatia as part of their regular advisory visits. Their report on Croatia's economy was published by the IMF and the central bank on Monday.
The IMF noted that relatively low levels of public and private investments, and the emigration of young people hamper the nation's medium-term growth prospects.
"Emigration and population aging are generating labor shortages. They also challenge the long-term sustainability of the pension and the healthcare systems. This calls for a smartly focused transformation to a more dynamic economy, and a more efficient state," the IMF said, adding that "a sizable restructuring of public administration" was essential.
Other important issues to tackle are fixing the health care and pension systems, the IMF said, noting that although some progress has been made on those fronts, the momentum needs to be sustained.